Speed to market is a key concern for insurers. Improving the time it takes to research, develop, file, implement, and launch a new product is consistently among the top priorities for insurers that want to target new and existing markets with products that match customer needs and react to regulatory changes. Insurers should carefully examine their product development processes to understand where delays arise and why.
Where Delays Arise…
The steps between a product’s conceptualization and its eventual market launch generally break down into seven key phases:
- Ideation: When the product is conceptualized
- Research: When necessary background information about the target market is gathered
- Design: When the product’s features and parameters are determined
- Drafting: Where the policy language is drafted, and the product is documented for filing
- Filing: Where the product is submitted to regulatory agencies (and possibly revised)
- Technical Implementation and Testing: Where the product is coded or configured in insurer systems and tested for quality assurance
- Product Launch: When the product is rolled out to distribution networks and sold
Some refer to the phase that takes the longest as “the long pole in the tent” or the “long pole.” Any phase can be long pole, but research, design, filing, and technical implementation and testing are the most common. Technical implementation/testing is frequently perceived as a long pole, particularly by business partners who don’t have a full view into IT processes or tools.
…And Why
Understanding what contributes to delays in the long-pole phase and why that phase is longer than others may yield insights that lead to faster development. Novarica reached out to CIO members of the Novarica Research Council (38 life/annuity insurers and 63 property/casualty insurers, midsize and large) to ask about their average time to market for new product introductions and modifications by line of business.
Aside from company size, which most insurers cannot easily change, Novarica confirmed that there is no single factor about insurers or their processes that consistently correlate to faster speed to market for new products. However, modern systems (homegrown or vended) can help accelerate the delivery of product modifications.
Ultimately, speed to market comes down to process. Any part in the process can be an opportunity to streamline, and any part can have delays that can impact the overall process. Given the complexity of the insurance product development cycle, it can be helpful to ask: What factors inhibit the process and cause it to move more slowly, and how can those be corrected?
See Novarica’s recent reports, Speed to Market for Property/Casualty Insurers and Speed to Market for Life/Annuity/Benefits Insurers, for more on this topic.
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